My income varies so wildly that I can earn $15k one month and $1k the next. I have multiple projects and sometimes a product goes viral and does really well.
Due to how my income goes up and down constantly, I generally just feel poor and in constant struggle mode.
The project I’m most passionate about also does the least well financially. I’m not super ambitious, I started my company to try to make a difference. I’m thinking of getting a job again after 8 years of being self-employed.
Anyone relate?
I can relate… when I started my first company, I had -US$5k … I borrowed a $5,000 cash advance on my credit card! Wow, that was… ill-advised. But I made it… first, if I knew I had money coming in at the end of the week, I was happy. Then, the end of the month. Then, the end of the quarter.
Eventually, I figured out to (a) be personally debt-free (no revolving debt, no car loans. A mortgage was ok, but I purposely paid off my student loans as quickly as possible); and, (b) to keep a couple of months’ living expenses in my short-term savings so I could absorb the ups-and-downs.
Weirdly, as I close in on the end of my career, I am back in that same situation (divorce, lost my business, kids in university, emigrating)… cash flows are less predictable, and I rely on my short-term savings to provide a cushion.
Long-term, my recommendation remains the same as when I was young: minimize recurring expenses, have a fund to absorb the dips in income, and plan for the future (with savings for a house or other big investment, and a private pension fund).
Also – sell more!